Evergrande sets up new EV firm following botched Faraday Future investment

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Chinese real estate giant Evergrande has set up a new energy vehicle company with four wholly owned subsidiaries, the latest in a series of moves that sees the company increase its focus on electric cars.

Evergrande New Energy Vehicle Company was established in the southern Chinese city of Guangzhou on Jan. 25 with a registered capital of $2 billion, according to public records. A month later, it changed its name to Evergrande National New Energy Vehicle Group. The company will focus on energy technology research, engineering, and the sale of auto parts.

Prior to setting up its own new EV firm, Evergrande invested in US-based electric car startup Faraday Future. However, the deal led to a months-long spat as Faraday sought an advance on an installment that made up part of Evergrande’s investment. The company refused, later canceling the deal and allowing Faraday to seek investment elsewhere.

Since then, Evergrande has shown resolve in increasing its involvement in the electric vehicle industry. In January, Evergrande pledged $930 million through its subsidiary Evergrande Health for a 51% stake in National Electric Vehicle Sweden (NEVS), a Chinese consortium owned by the municipality of Tianjin, a city in northern China. Later that month, Evergrande invested more than RMB 1 billion (around $150 million) for a 58% holding in electric vehicle battery manufacturer Shanghai CENAT New Energy.

New energy vehicles form an important part of the Made in China 2025 initiative, a broad plan to move the country up the industrial value chain. The industry has seen increasing growth, in part, due to government subsidies. Sales of EVs increased by more than 60% last year to reach over 1.2 million. That number is expected to reach 1.6 million in 2019.